DoD's $223M Engineering Services Contract Awarded to Raytheon Company for Florida Operations

Contract Overview

Contract Amount: $223,092,193 ($223.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2011-06-20

End Date: 2013-03-26

Contract Duration: 645 days

Daily Burn Rate: $345.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: ESTABLISH LOT 3 TIME AND MATERIAL CLIN.

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32826

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $223.1 million to RAYTHEON COMPANY for work described as: ESTABLISH LOT 3 TIME AND MATERIAL CLIN. Key points: 1. Contract value represents a significant investment in engineering services for the Department of Defense. 2. The award was made under full and open competition, suggesting a robust bidding process. 3. The contract duration of 645 days indicates a medium-term project requirement. 4. Raytheon Company, a major defense contractor, secured this award, highlighting its established presence. 5. The contract is categorized under Engineering Services, a critical support function for defense operations. 6. The use of Time and Materials pricing may introduce cost variability if not closely managed.

Value Assessment

Rating: fair

The contract value of $223 million for engineering services over approximately two years is substantial. Benchmarking this against similar large-scale engineering contracts within the Department of Defense is challenging without more specific service details. However, the Time and Materials (T&M) pricing structure, while flexible, can sometimes lead to higher costs compared to fixed-price contracts if not meticulously managed and monitored for efficiency. The absence of a specific per-unit cost benchmark makes a direct value-for-money assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This method typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The specific number of bidders is not provided, but the 'full and open' designation suggests a healthy level of competition, which is generally beneficial for price discovery and achieving favorable contract terms.

Taxpayer Impact: A full and open competition process is favorable for taxpayers as it increases the likelihood of obtaining services at competitive market rates, potentially leading to cost savings compared to sole-source or limited competition awards.

Public Impact

The primary beneficiary is the Department of the Army, receiving essential engineering services. The services delivered are critical for supporting defense operations and infrastructure, likely in Florida. The geographic impact is specified as Florida (ST: FL, SN: FLORIDA), indicating localized operations. The contract supports the defense industrial workforce, potentially creating or sustaining jobs in engineering and related fields within Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost overruns if not strictly monitored for efficiency and necessity of hours billed.
The large contract value necessitates robust oversight to ensure performance aligns with expectations and budget.
Lack of specific performance metrics or deliverables in the provided data makes it difficult to assess the quality and effectiveness of services rendered.
The duration of the contract (645 days) requires sustained management attention to ensure ongoing alignment with evolving defense needs.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process that likely yielded favorable terms.
Raytheon Company is a well-established defense contractor with a significant track record, implying a degree of reliability and expertise.
The contract supports critical engineering services for the Department of Defense, contributing to national security objectives.
The specified geographic location (Florida) indicates a focused application of resources, potentially benefiting regional economic activity.

Sector Analysis

Engineering services are a vital component of the defense sector, encompassing design, development, testing, and technical support for military systems and infrastructure. The market for these services is substantial, driven by the continuous need for modernization, maintenance, and operational support of defense assets. This contract fits within the broader category of professional services procured by the DoD, which often involves complex technical expertise. Comparable spending benchmarks would typically be found within the 'Engineering Services' NAICS code (541330), with contract values varying widely based on scope and duration.

Small Business Impact

The provided data indicates that small business participation (SB: false) and set-asides (SS: false) were not factors in this specific award. This suggests the contract was not targeted towards small businesses, and there is no explicit information regarding subcontracting opportunities for small businesses. Consequently, the direct impact on the small business ecosystem for this particular contract appears minimal, with the primary award going to a large prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be defined within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated by the contract's award under full and open competition, which is publicly recordable. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Department of Defense Engineering Services
Army Corps of Engineers Contracts
Defense Infrastructure Support
Raytheon Company Defense Contracts
Time and Materials Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Need for robust government oversight to manage scope and ensure efficiency.
Lack of specific performance metrics in summary data hinders detailed assessment.
Contract duration requires sustained management attention.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $223.1 million to RAYTHEON COMPANY. ESTABLISH LOT 3 TIME AND MATERIAL CLIN.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $223.1 million.

What is the period of performance?

Start: 2011-06-20. End: 2013-03-26.

What is Raytheon Company's track record with similar Time and Materials engineering services contracts awarded by the Department of Defense?

Raytheon Company, now RTX, has a long history of performing complex engineering and technical services for the Department of Defense across various platforms and domains. While specific data on their performance solely on Time and Materials (T&M) engineering services contracts is not detailed here, their extensive experience suggests a capacity to manage such agreements. T&M contracts require diligent oversight from both the contractor and the government to ensure cost control and prevent scope creep. Raytheon's established position as a major defense contractor implies they possess the necessary infrastructure and expertise to handle T&M requirements, but performance can vary based on project specifics, management, and government oversight effectiveness. Historical data from contract databases would be needed to assess their specific performance metrics, such as cost variances or delivery timeliness, on comparable T&M contracts.

How does the $223 million contract value compare to other engineering services contracts awarded by the Department of the Army in Florida during the 2011-2013 period?

The $223 million contract value awarded to Raytheon Company is substantial for engineering services within the Department of the Army, particularly for a contract spanning approximately two years (June 2011 - March 2013). To provide a precise comparison, one would need to analyze the universe of engineering services contracts (NAICS 541330) awarded by the Department of the Army specifically within Florida during that timeframe. However, given the scale, this award likely represents one of the larger contracts for engineering support in the region during that period. Many engineering contracts within the DoD can range from a few million to hundreds of millions, depending on the complexity, duration, and specific requirements, such as infrastructure development, system design, or technical support for major installations.

What are the primary risks associated with a Time and Materials contract of this magnitude for engineering services?

The primary risk associated with a Time and Materials (T&M) contract of this magnitude ($223 million) for engineering services is the potential for cost overruns. Unlike fixed-price contracts, T&M agreements do not have a ceiling on the total cost, as payment is based on the actual hours worked and materials used. This can lead to increased expenditures if the project scope expands, if labor hours are not efficiently utilized, or if material costs escalate unexpectedly. Another significant risk is the potential for scope creep, where the project's objectives gradually expand beyond the initial agreement without adequate adjustments to cost or schedule. Effective government oversight, detailed task orders, and robust monitoring of labor hours and material usage are crucial to mitigate these risks and ensure the government receives good value for its investment.

What specific engineering services were delivered under this contract, and how did they contribute to the Department of the Army's mission in Florida?

The provided data indicates the contract was for 'ESTABLISH LOT 3 TIME AND MATERIAL CLIN.' and falls under NAICS code 541330 (Engineering Services). However, the specific nature of the 'CLIN' (Contract Line Item Number) and 'LOT 3' is not detailed enough to ascertain the exact engineering services provided. These services could range broadly from architectural and engineering design for facilities, technical support for military systems, environmental engineering, or specialized consulting. Given the location in Florida, these services likely supported Army installations or operations within the state, contributing to infrastructure maintenance, modernization, or readiness objectives. Without more granular information on the CLIN description and task orders, a precise assessment of their contribution to the Army's mission is not possible.

What was the historical spending trend for engineering services by the Department of the Army in Florida prior to this $223 million award?

Analyzing the historical spending trend for engineering services by the Department of the Army in Florida prior to this $223 million award requires access to comprehensive federal procurement data. This specific award, valued at $223 million and awarded in June 2011, suggests a significant requirement for engineering support. To understand the trend, one would need to examine spending patterns for similar services (NAICS 541330) over several preceding fiscal years. Factors influencing spending include base operations, new construction projects, system upgrades, and specific operational needs within Florida's numerous Army installations. A surge in spending like this contract might indicate a major project initiation or a period of heightened infrastructure investment in the region.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 2603 CHALLENGER CT STE150, ORLANDO, FL, 32826

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $223,092,193

Exercised Options: $223,092,193

Current Obligation: $223,092,193

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W900KK07D0001

IDV Type: IDC

Timeline